NEW YORK (TheStreet) -- Shares of National Bank of Greece (NBG) fell 6.37% to close at $1.49 today as Greek markets declined.

The Global X FTSE Greece 20 ETF (GREK) - Get Report, designed to reflect broad based equity market performance in Greece, was down 1.62% to $12.74.

After reaching an agreement last week to extend the Greek bailout beyond its February 28 expiry date, a political clash between Spain and Greece took "a turn for the worse," after a top Spanish official said that Greece is negotiating a third bailout with the European Union, a claim that was denied by a representative of the eurozone's finance ministers, the Wall Street Journal reports.

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Greek officials declined to comment. No official renegotiated terms have been released, but the Greek markets reacted, moving lower on the day, with observers conjecturing about the implications.

"Today's announcement that a third EMU [European Economic and Monetary Union] bailout for Greece is under consideration signals the monetary union's determination to avoid a Greek exit and further deterioration of Europe's monetary union," Cornell Law Professor Robert Hockett told Barron's today.

"The underlying structural problem that has necessitated these bailouts, however, remains unchanged. Greece cannot realistically earn sufficient foreign exchange surpluses to pay down its debts with an overvalued currency, meaning that either the EMU will have to become a fiscal transfer union like the U.S. or Greece and other southern EU members will ultimately need a Mediterranean euro of their own," Hockett added.

Separately, TheStreet Ratings team rates NATIONAL BANK OF GREECE as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate NATIONAL BANK OF GREECE (NBG) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NBG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 64.84%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • NATIONAL BANK OF GREECE reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NATIONAL BANK OF GREECE turned its bottom line around by earning $1.98 versus -$27.80 in the prior year. For the next year, the market is expecting a contraction of 71.7% in earnings ($0.56 versus $1.98).
  • NBG, with its decline in revenue, underperformed when compared the industry average of 4.6%. Since the same quarter one year prior, revenues fell by 30.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has increased to -$344.49 million or 38.74% when compared to the same quarter last year. Despite an increase in cash flow of 38.74%, NATIONAL BANK OF GREECE is still growing at a significantly lower rate than the industry average of 303.10%.
  • 36.50% is the gross profit margin for NATIONAL BANK OF GREECE which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -5.49% is in-line with the industry average.
  • You can view the full analysis from the report here: NBG Ratings Report